3 Reasons to Invest in Building a Laneway Home
Have you ever considered investing in building a laneway home? In case you aren’t familiar with it, a laneway house is basically a fully independent small-scale residence that’s built at the backyard of an existing home. Normally, a laneway home faces a passageway. Laneway home real estate has gained much prominence, especially in the Metro Vancouver area in Canada. Here are three main reasons to invest in building a laneway house:
#1. Improved Privacy for Your Family Members
Perhaps you have an elderly parent who’d like to be close to you and still have his/her privacy maintained. In such a case, a laneway house will be an ideal dwelling place for him or her. Also, if you have children who are in the early adulthood stage, they might feel uncomfortable living with you under the same roof. They need some level of privacy too, and a laneway home will certainly serve the purpose.
Considering that a laneway home has its own parking spot, private entry and patio, its dweller enjoys a high level of privacy. In fact, this mini-house has all services and amenities that are found in large homes.
#2. Rental Income and Sale Profit
If you have a main house with an unoccupied and fairly large backyard (at least 550 square feet) and would like to supplement your income, building a rental laneway home will be a prudent decision. You can fetch a rental income ranging from $1,500 to $1,700 by renting out just a small one-bedroom laneway house, and up to $1,800 for a two-bedroom. However, besides size, the income is dependent on the house’s location, design and finishing.
Furthermore, if you took a mortgage loan to finance the construction of your main residence and the rented-out laneway house, you stand a chance to qualify for a tax deduction on the loan’s mortgage interest.
In addition to rental income, your laneway house investment can also bring you some profit in case you decide to sell your home in future. Buyers will be willing to pay more for a home with a lane house as compared to the one that doesn’t have. Ultimately, you might find out that the price at which you’ll sell both the main house and the laneway home is higher than their total construction cost.
#3. Low Cost
The cost of building a laneway house roughly ranges from $250,000 to $300,000 but there are some additional fees. Nevertheless, the sum of all the costs and fees are much less than of constructing or buying a primary residence. This is because a laneway house is compact, with no redundant spaces such as spare bedrooms, flex rooms, or hallways. Besides, the cost of land acquisition is foregone for the case of a laneway home since it’s within your main residence compound.
Constructing a laneway house is usually cheaper compared to purchasing a condominium of the same size in a city. Besides, you’ll forego condo fees.
A lane house isn’t just an upgraded garage. You can get some good bucks out of it or make your family more comfortable by giving them some privacy. Whichever the purpose, a laneway home is a good investment.